Hazards ahead?

THE CHANGES INTRODUCED by FA 2006 have increased and complicated the inheritance tax charges faced by trustees and have introduced major funding difficulties for existing trusts where trust assets are neither liquid nor income-producing. And in addition to recognising when a charge arises it is also important to consider exactly what one is required to value and how the tax charge will be funded. This article seeks to build on 'Inheriting the changes' by Carolyn Steppler (Taxation 21 September 2006 page 678) by taking a further look at the new tax charges within accumulation and maintenance (A & M) trusts and the position within the new regime for trusts for 18 to 25-year olds.
It is worth remembering that no tax will be payable if the trust property is eligible for full inheritance tax business property relief (IHTA 1984 s 103 et seq)...